There's an ugly little story in today's New York Times, front page stuff, about a little known side effect of foreclosure. May cause dizziness, nausea, vomiting...
Here's the scenario; You lose your home to foreclosure and suffer the upheaval, indignity and financial repercussions that go along with it. Bruised, beaten and licking your wounds, you take some small comfort in the fact that at least it's over and done with, it's all behind you.
Not so fast. One day you go to the mailbox of your rented flat, and amidst the bills and junk is a letter from the IRS stating that you owe them $34,000 in back taxes. The letter explains that the debt that was canceled by such-and-such bank on your homes foreclosure, is subject to income taxes, as well as penalties and late fees.
Unbelievable! Read it here> After Foreclosure, a Big Tax Bill From the I.R.S.